Economic burden

“ So the balance between production and consumption, which in previous ages was more or less adequately maintained by natural conditions, has been entirely destroyed, and a major social-economic problem created. ”

“ These problems of job control, of wealth and income distribution, of industrial inter-relations and of the relation between the state and industry are pressing for solution in every important centre of modern economic life. Each constitutes a disturbing element and contributes its mite to the aggregate of social instability and unrest that are racking the economic world. ”

“ With natural opportunities thus set free to labour, with capital and improvements exempt from tax and exchange released from restrictions, the spectacle of willing men unable to turn their labour into the things they want would become impossible; the recurring paroxysms which paralyse industry would cease; every wheel of production would be set in motion; trade would increase in every direction and wealth augment on every hand. ”

“ That the continued and increasing depression of the manufacturing, commercial, and agricultural interests of this country, and the wide-spreading distress of the working classes, are most alarming:—manufacturers without a market, and shipping without freight; capital without investment, trade without profit; and farmers struggling under a system of high rents, with prices falling, as the means of consumption by the people fail; a working population rapidly increasing, and a daily decreasing demand for its labour ”

“ The usual balance of demand and supply of labour being thus deranged, has caused occasional gluts, and it may require a time, and much further misery may ensue, risking political convulsion, before the social economy adjust itself, unassisted, to the new order of things. ”

“ But if, on the other hand, growth in the supply of money does not keep pace with the economy's current production, then prices will fall, the nations's labor force, factories, and other production facilities will not be fully employed, or both. ”

“ Unproductive expenditure of what was destined to be expended productively, they always characterise as a squandering of resources, and call it profusion and prodigality. The productive expenditure of that which might, without encroaching upon capital, be expended unproductively, is called saving, economy, frugality. Want, misery, and starvation, are described as the lot of a nation which annually employs less and less of its labour and resources in production; growing comfort and opulence as the result of an annual increase in the quantity of wealth so employed. ”

“ This unthrift in the matter of the prime essential productive force and economic value is again partly accounted for by the very pressure of opportunity afforded by unlimited resources and the insatiable demand of the world market. There has not even been sufficient time for consideration of many economies in process and administration whose value to manufactures would be unquestioned. ”

“ Within the vitals of the economic system upon which it subsists the plutocracy has found a source of never-ending torment in the form of a constantly increasing surplus.
2. The Knotty Problem of Surplus
The present system of industry is so organized that the worker is always paid less in wages than he creates in product. A part of this difference between product and wages goes to the upkeep and expansion of the industry in which the worker is employed. Another part in the form of interest, dividends, rents, royalties and profits, goes to the owners of the land and productive machinery. ”

“ The process of wasting the surplus profits in competition and luxury was slow and protracted, and meanwhile productive industry languished and the workers waited in idleness and want for the surplus to be so far reduced as to make room for more production. ”

“ The other phenomenon from which the notion of a general excess of wealth and superfluity of accumulation seems to derive countenance, is one of a more permanent nature, namely, the fall of profits and interest which naturally takes place with the progress of population and production. The cause of this decline of profit is the increased cost of maintaining labour, which results from an increase of population and of the demand for food, outstripping the advance of agricultural improvement. ”

“ Thus the burden of toil is increased and the reward of industry is lessened for all who work; the surplus out of which life would be replenished is consumed, and the amount of life in the nation at large is lessened. ”

“ The prostration of trade has arisen from extravagance, he repeatedly declares. "The commercial depression, so long, so monotonous, so heavy, and so dull, came from the excessive consumption of English capital in unwarranted constructions beyond savings, and unwarranted expenditure in living by all classes, which destroyed wealth without repairing it with new productions." ”

“ That provisions and labour should become dear by the increase of trade and money is, in many respects, an inconvenience; but an inconvenience that is unavoidable, and the effect of that public wealth and prosperity which are the end of all our wishes. ”

“ It accumulates a heavier supply than is demanded in the home-market. It overwhelms factories with their own goods, and drowns the manufacturer in bankruptcy, unless he stops work. It turns worthy, as well as unworthy, working-men adrift. It brings on all the horrors so piteously complained of. What can avert such consequences? There are, doubtless, factors in this problem unnoticed here, but this to me appears to be the main one. Allow wages to descend steadily, as the market demands, instead of holding them up till a crisis is reached. ”

“ This check to production, beginning at the basis of interlaced industry, propagates itself from exchange point to exchange point, cessation of supply becoming failure of demand, until, so to speak, the whole machine is thrown out of gear, and the spectacle is everywhere presented of labor going to waste while laborers suffer from want.
This strange and unnatural spectacle of large numbers of willing men who cannot find employment is enough to suggest the true cause to whomsoever can think consecutively. ”

“ The primary and fundamental occupations, which create a demand for all others, are evidently those that extract wealth from nature; and hence, if from one exchange point to another and from one occupation to another we trace this check to production, which shows itself in decreased purchasing power, we must ultimately find it in some obstacle that checks labour in expending itself on land. And that obstacle, it is clear, is the speculative advance in rent, or the value of land, which produces the same effects as (in fact, it is) a lock-out of labour and capital by landowners. ”

“ But the burden thus thrown on agriculture and commerce lowers the gains of those industries, lessens the attractiveness of them to the laborer, lessens the value of the laborer’s other chance, lessens the competition of other American industries with manufacturing, and so, by taking away from the blessing which God and nature have given to the American laborer, enable the man who wants to hire his services to get them at a lower rate. ”

“ So capital, that is, accumulated labor, was first spent in improvements in the new country, and then, and probably in a far greater amount, spent in more costly food, clothes, equipage, and other luxuries in the older country. The successive sales at advancing prices simply increased the sense of new wealth, and augmented more and more this destructive consumption of the products of labor, or the destructive diversion of labor from productive to unproductive activity at the East by the well-to-do classes. ”

“ Everything seems to be going on as usual, commerce and industry vigorous and expanding, when suddenly there comes a shock, as of a thunderbolt out of a clear sky—a bank breaks, a great manufacturer or merchant fails, and, as if a blow had thrilled through the entire industrial organization, failure succeeds failure, and on every side workmen are discharged from employment, and capital shrinks into profitless security. ”

“ For, it is only with the produce of its labor and capital that one country can demand, or can obtain, in exchange, the produce of the labor and capital of another. The idea that the lowering of wages can increase, or the increase of wages can diminish, the trade of a country, is as baseless as the idea that the prosperity of a country can be increased by taxes on imports, or diminished by the removal of restrictions on trade. ”

“ What always happens when scarcity appears is that "the trade," indeed the whole world, insists upon the duty of increased production. As a result, wages and everything necessary in production advance. Costs sink to a second place. People having been frightened inevitably hoard, and finally when the joint effort of the world oversteps the market, there come the collapses called "panics," and thousands of business men are swept to ruin. ”

“ Political economy requires farther expansion in order to include all the elements of this great social problem.
It is a true doctrine that demand and supply regulate the price of all things, labour included. ”

“ The number of bankruptcies will be unparalleled; export stops—and thereby thousands of factories are condemned to idleness; the supply of food ceases—and thereby the prices of the means of life rise enormously. ”

“ Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone. ”

“ As there is little demand for the products of labor, the production must decrease to conform to the decreased demand. Employment must be restricted, wages must be reduced, and transportation and every form of exchange must shrink with a shrinking circulation. There must be less employment on the farm, less employment in the factories and forests, less employment in the mines, less employment on the lines of transportation, less employment of merchants and middlemen, less increase and distribution of the things which are necessary to the comfort and subsistence of the human family. ”

“ Because for a long period before the crash our production had been outrunning our consumption. The workers were producing more than they could buy with the wages they received. Our predicament is primarily due to the inequitable distribution of the earnings of industry as between capital and labor. ”

“ And, without consumption, what does production amount to? What does it avail us that our stores and granaries are overstocked, if the people are unable to buy? The thing is reduced to a cruel mockery when stores and granaries are over-gorged, while people clamor in vain for clothing and food, and drop dead within reach of these prime elements of warmth and sustentation.
What does it avail us if the balance of trade be in our favor by one, or two, or three hundred millions of dollars, if this result be obtained by the degradation and death of our own people? ”

“ Thus, where the value of land is low, there may be a small production of wealth, and yet a high rate of wages and interest, as we see in new countries. And, where the value of land is high, there may be a very large production of wealth, and yet a low rate of wages and interest, as we see in old countries. And, where productive power increases, as it is increasing in all progressive countries, wages and interest will be affected, not by the increase, but by the manner in which rent is affected. ”

“ Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. ”

“ While industry remains unorganized such waste of capital must continue, for lacking an estimate of the quantity of commodities required in any particular department, the limits of consumption can only be found by fruitless attempts to discover an unsatisfied demand. This blind application of capital, not to service, but in the hope of gain, accounts for the waste of large quantities of labour. ”

“ But these savings of the past were accumulated, after all, by comparatively few of the workers; not by the many, who lived from hand to mouth, happy-go-lucky, spending and enjoying in time of abundance, suffering in time of poverty and stress, making no provision even for their own future, still less recognizing any duty to their country or to posterity to produce economically and regulate their expenditure wisely so as to carry forward a surplus. ”

“ That is to say in other words, the absorption of goods and services by extra-industrial expenditures, expenditures which as seen from the standpoint of industry are pure waste, would have to go on in an increasing volume. If the wasteful expenditure slackens, the logical outcome should be a considerable perturbation of business and industry, followed by depression; if the waste on war, colonization, provincial investment, and the like, comes to an abrupt stop, the logical consequence, in the absence of other counteracting factors, should be a crisis of some severity. ”